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Open Hardware: Good for Your Brand, Good for Your Bottom Line

With the rise of IoT, we're inside a short window where "open" is a
strong differentiator for hardware products. Is your company ready to take
advantage of it?

I don't know how to put this, but Hardware is kind of a Big Deal, and thanks
to the Internet of Things (aka IoT), it's getting bigger every year. The
analyst firm IDC expects spending on IoT to reach nearly $800
billion USD by
the end of 2018. A study by Intel shows that by 2025, the global worth of IoT
technology might be as high as more
than $6 trillion USD; whereas Forbes reports
that the global market could be nearly
$9 trillion USD in 2020.

These statistics are based on the traditional model of closed design and
development of the chips, boards and objects that will make these devices a
reality. However, what if hardware developers were to learn from and leverage
the popularity of free and open-source software (aka FOSS)? What if the
future of IoT were Open? It's my belief that the device developers who apply
the lessons of FOSS to hardware development will be those best positioned to
become the powerhouses of that $9 trillion market. Similarly to software,
open hardware will be seen first as a differentiator (rather than an
eccentricity) and later, as the industry matures, as the default operating
mode for hardware development.

Open hardware will require a lot of evolution before it becomes the default
development paradigm for IoT. The current state of open hardware closely
resembles that of free software 30 years ago: it exists, but in a
nebulous form. While organisations like the Open Source Hardware
Association and the Open Hardware
Repository are working to change this, the
fact remains that there currently are few clear legal, social or procedural
norms around open hardware development. There is no hardware equivalent of
the Open Source Initiative's list of approved licenses or agreement on
whether a license
is even needed at all. The diversity of tools required for
hardware design makes collaboration and interoperability more difficult.
These legal and procedural questions contribute to a very high barrier to
entry for releasing designs as open hardware. That barrier isn't
insurmountable, however. Already advancements in 3D printing as well as
emulation and virtualization through digital twins are enabling types of
collaboration that were impossible just a few short years ago. As these
methods continue to adapt, the resulting emergent and open processes and
norms will drive further and faster innovations.

The openness of hardware also will be hampered for a while by the limitations
imposed by chip makers. For instance, the Mark I voice assistant speaker is
certified as open hardware, but it includes components built upon proprietary
chipsets and boards. Joshua Montgomery, CEO of Mycroft, sees this as a
valuable stepping stone toward an entirely open hardware platform. "For now,
a lot of open hardware is like LEGO: while the bricks themselves aren't
open, the designs built with them can be." This stepping stone has enabled
Mycroft to iterate on the Mark I, which incorporates off-the-shelf hardware
like Raspberry Pi and Arduino, to create the Mark II, which features a board
custom- and openly-designed for security, privacy and flexibility.

Chip makers are starting to catch on to the advantages of open, however.
SiFive has released an entirely open RISC-V development board. Its campaign
on the Crowd
Supply crowd-funding website very quickly raised more than $140,000
USD. The board itself is
hailed as a game-changer in the world of hardware.
Developments like these will ensure that it won't be long before the hardware
equivalent of LEGO's bricks will soon be as open as the designs built
using them.

In the March
2018 issue of Linux Journal, I encouraged companies to wait until
they're secure and established in their market before releasing
mission-critical software as open source. The reason here is, of course, that
it's quite simple for someone else to take that software, spin up a new cloud
instance and create a company that competes in your market. There are very
good business reasons for a company retaining its software intellectual
property until the company has locked in its market.

However, that's not currently the case for hardware. The complexities
involved with manufacturing are far more daunting than those around launching
a new software firm. The knowledge, regulations, testing and tooling
involved with bringing new hardware to market create a massive—and
massively protective—barrier that's compounded by those undefined legal,
social and procedural norms I mentioned earlier. This provides open hardware
startups the freedom to share their designs after (or even before) product
launch while still retaining prime mover advantage, simply because no other
company would be able to spin up the tooling required quickly enough to
impact the sales and market of that prime mover. Once a piece of open
hardware is released to customers, the company creating it is already so far
ahead of any others that would use its designs that there is little danger of
market loss or competition. According to Josh Lifton, CEO of Crowd Supply,
even after helping hundreds of creators launch their open hardware products
on the platform, "...we have never gotten any report of an idea from a Crowd
Supply project getting stolen."

While open hardware does not share free and open-source software's business
risks for releasing of intellectual property, it does share its difficulties
in attracting contributors and building a community. While both open
endeavors represent the field of dreams for creators, it remains true that
if you build it, they will not necessarily come. This is especially true for
open hardware where people are not only less used to the idea of
contributing, they're also often less prepared to do so. Aside from the
specialized tooling required to read, manipulate and understand hardware
design files, there's the additional problem of a knowledge gap. Relatively
speaking, far more people are equipped with the knowledge and resources
necessary to contribute to FOSS projects. When source files are distributed
for a free and open-source software project, many people already know what to
do with them. When source files are distributed for an open hardware project,
comparatively few people will have the electrical engineering, industrial
design, stress analysis or other related experience (let alone the very
expensive tools required) to contribute effectively. While this naturally
leads to considerably fewer contributions to and collaborators on an open
hardware project, it also means that those collaborators are more likely to
be qualified and their contributions of a higher quality.

Hope of contributions should not be the primary reason for releasing hardware
designs under an open license. As Kaia Dekker, CEO of Keyboardio points out,
building a business while relying on volunteers for contributions "really
isn't something that necessarily works out". This is a consideration that's
overlooked by a lot of the new breed of "open first" software businesses
springing up these days, but that the sparse contributions make impossible to
ignore for open hardware.

Despite this, open hardware still allows companies to reduce the time and
expense required for research and development. For instance, Dekker says,
developing the Keyboardio Model 01 would not have been practical without the
open platform of Arduino or the vibrant community around it. Open hardware
components are similar to libraries or modules for software: they allow an
organisation to add functionality without having to develop it themselves.
Entirely new products, such as the Keyboardio Model 01 or the Mycroft Mark I,
can come to market thanks to what are essentially off-the-shelf open hardware
components.

Joshua Montgomery of Mycroft AI points out that as important as the R&D
benefits were to the company when they were getting started, they're
finding that opening the new design of the Mark II is also opening
possibilities that they'd not have seen had they kept their hardware
proprietary. Through careful design of the Mark II board, Mycroft has created
a new off-the-shelf component that partners and other businesses can use, in
combination with the open-source Mycroft Artificial Intelligence platform, to
add a voice assistant feature to their own devices. This increases adoption
of the AI platform software along with the contributions and collaborators on
it.

By designing their hardware to work in many different contexts, then releasing
it as an open solution, Mycroft also has gained the benefit of economy of
scale for the company as well as for all companies using the open component.
When all companies order the component from the same manufacturer, the
subsequent "run" of the part becomes cheaper for every company that uses it.
This open supply chain also reduces risk for all participants. Should a
supplier fail or withdraw from manufacturing a component, with open hardware,
it's possible to spin up tooling in another location. With proprietary
hardware, it's possible, if not likely, that companies reliant upon that
component will need to redesign their products when a component is no longer
available. Naturally this type of economy of scale will depend a lot upon the
market and company strategy, but the Mycroft example, even in these early
days of open hardware, proves that the open approach can provide innovation
opportunities and benefits to innumerable companies and entrepreneurs.

According to Kaia Dekker, none of these benefits would be possible without
the communities that form around open hardware projects. "It opens doors to
us that would be closed otherwise." Keyboardio has found unexpected success
in recruiting firmware development and other talent from its community.
That same community can develop after-market accessories for the Model 01,
adding, if they wish, features such as wireless capability, thanks to the open
hardware at the core of the device. This ecosystem of accessories as well as
the supportive community has strengthened the Keyboardio brand as its
community members have become their most passionate and outspoken advocates.
Keyboardio has found that the transparency has increased its perceived
reliability in the eyes of its target market, which itself increases the
market's trust in the company. Josh Lifton agrees and says that many Crowd Supply
creators have seen similar results. "A lot of these people are early adopters
and innovators. This type of person usually has a strong community-minded
ideology."

The transparency of open hardware does more than build trust in its
communities. It also builds trust in the entire customer base. According to
Joshua Montgomery of Mycroft, the "radical transparency" of the Mark I and
Mark II devices help to support their reputation for privacy and security.
Increasingly, this sort of reputation can have a huge impact on companies
looking to enter certain markets. Open hardware ensures that there is never a
black box. Consumers, regulators and security auditors all have equal access
to the designs of the devices. In an environment where customers are more
privacy-aware than ever, this type of transparency can be a powerful
differentiator for products.

In 1997, Clayton Christensen detailed the dangers of ignoring the new
paradigms in business in The
Innovator's Dilemma. Hardware and IoT creators
today are at risk of stumbling straight into that dilemma if they don't
embrace the type of innovation and collaboration that free and open-source
software has proved is possible. While the ecosystem and contribution norms
are still taking shape around open hardware, it's clear from the benefits
listed here that the current environment provides enormous opportunities for
companies willing and able to work with and mold that ecosystem. The
companies that recognise this now are those that will lead the way for
several decades to come.

Vicky is the proud winner of the Perl White Camel Award (2014) and the O'Reilly
Open Source Award (2016). She's a moderator and author for opensource.com, a Director
for the Open Source Initiative, and a frequent
and popular speaker at free/open-source
conferences and events. She blogs about free/open source, business and technical
management at http://anonymoushash.vmbrasseur.com.